Probably the most frequently asked question I am presented with is “How much does it cost to set up a recruitment business?” and my response is usually “How long is a piece of string?”.
I have worked with start up’s with £250,000 in the bank and those with £250 in the bank. The amount that you spend is relative but does not have to impact on how successful your business will become in the long term. £5,000 is a nice round sum. It can cover your initial set up costs, a half decent website, contracts, compliance and a small buffer to keep you afloat for the first placements to come in but if you can manage to acquire slightly more, it will certainly help.
If you are looking into setting up a contracts or temps desk then you will face more immediate challenges in terms of cash flow and additional sources of funding will become necessary. Cash flow is king and for many start up recruitment businesses is often their downfall in the early stages of trading. It is therefore vital that you include a full P&L projection as part of your business plan and get the correct levels of funding in place.
Alison Kennedy is MD of Recruitment Business Solutions. She offers a free 1 hour phone consultation for start up recruitment businesses and also has free business planning tools available. Too find out more or to book an appointment contact her at; info@recruitmentbusinesssolutions.co.uk
